Question

i mainly need help with requirments 1& 2!

thank you.

Gold Nest Company of Guandong.china is a family owned enterprise that makes birdcages for the South China market The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales The company uses a job order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $13,500 of manufacturing overhead for an estimated activity level of $45.000 direct labor dollars. At the beginning of the year, the inventory balances were as follows Raw Materials $10.600 Work In Process S4000 Finished Goods 58700 During the year, the following transactions were completed Raw materials purchased on account, $160.000 Raw materials used in production, $143,000 (materials costhg 5122,000 were charged directly to jobs, the remaining materials were indirect) c Costs for employee services were incurred as follows: Direct Labor $177,00 Indirect Labor $325.000 Sales Commissions $28.000 Admin. Salaries $43,000 d. Rent for the year was $18,700 ($13,700 of this amount related to factory operations, and the remainder related to seling and administrative activities 2. Utility costs incurred in the factory, 519.000 . Advertising costs incurred, $13,000 8. Depreciation recorded on equipment, $24,000. (515.000 of this amount related to equipment used in factory operations, the remaining 59.000 related to equipment used in selling and administrative activities.) n. Manufacturing overhead cost wa cost was applied to jobs, $__ 1 Goods that had cost $230.000 to manufacture according to the job cost sheets were completed. Sales for the year (all paid in cash) totaled $514 000. The total cost to manufacture these goods according to the job cost sheets was $219.000 Required: 1. Prepare journal entries to record the transactions for the year. 2. Prepare T-accounts for each inventory account Manufacturing Overhead, and cost of Goods Sold Post relevant data from your journal entries to these accounts (don't forget to enter the beginning balances in your inventory accounts). BA. Is Manufacturing Overhead underappiled or overapplied for the year? 30. Prepare a journal entry to close any balance in the Manufacturing Overhead account to cost of Goods Sold 4. Prepare an income statement for the year. Al of the information needed for the income statement is available in the Journal entries and accounts you have prepared

Answer 1

Transaction! Journal Entry to record transaction for the year : Debit Credit Accounts ti He Raw material Inventory Accounts Payable $ 160000 $ 160 000 $ 12.2000 b. Work in Process inventory Manufacturing overhead Raw material Inventory $ 21000 $ 143000 C. Work in Process Inventory Manufacturing overhead Sales Commission Expense Adminstrative salaries Expense Cash $177000 $ 32 5000 $28000 $ 43000 $573000 Manufacturing overhead Rent Expense Cash $13700 $5000 $18700 e. $19000 Reedtes Manufacturing overhead Cash $19000 f Advertising Expense $ 13000 $13000 Cash $ 15000 i manufacturing overhead Depreciation Expense Accumulated depreciation $ 9000 $ 24000 h Work in Process Inventory $407100 (No te u Manufacturing overhead $407000

Credit Debit Transaction Account title finished goods inventory Work in Process Inventory $ 230000 $ 230000 رن في j Cash Sales Revenue $ 514 000 $ 514 000 (ii) $ 219000 Cost of Goods sold finished goods inventory $ 219000 Note : working notes Calwlation of many facturing overhead cost applied to job : Manufactur Percentage of acturing overhead = Direct laborx cost Manufacturing Cost applied to Job Overhead to direct labor - $177000 x 2 30.1. - $ 470100 Percentage of Manufacturing Manufacturing on over head Exloo Overhead to Direct labor Direct labor $103500 X100 $45000 - 2301 Note 2 Overhead over applied = Applied overhead -A cheal overhead = patalpe cele 4615abo <$13700 • $ 407100 - $378 700 = $ 28400 Aukral overhead = $ 21000 + $ 325000 + $ 13700 + $ 19000 = $ 378 700
As you specifically mention to answer only 1 and 2 , I answer only those 1 and 2.
Preparing T-Accounts Raw material Inventory Beginning Bel. $10600 $122000 Work in Process Accounts Payable $160000 $21000 Manufacturing Ending Bal. |$27600 overhead Work in Process inventory Beginning Bal $4000 $230000 finished goods inventory Raw material inventory $122.000 Cash (Direct labor) $ 177000 nufacturing overhead $40 7100 $480100 Ending Bal Manu Finished Goods Inventory 219000 Beginning Bal $ 8700 $ 2042.d cost of Goods sold Work in Process Inventory $230000 Ending Bal $19700 Manufacturing overhead Raw material Inventory $21000$ 407100 Work in process (Applied) Cash (Indirect la bor) $325ood Cash I Rent Expensel |$13700 Cash (Utility) $19000 Accumulated Depreciation Ending Bal. $28400 (V) Cost of Goods sold finished Goods Inventory 1$ 219000 Ending Bal $319000